Will the DOJ Really Pull the Plug on Comcast/TWC?

Over the weekend, that is the news that started buzzing. Staff lawyers at the Department of Justice are said to be making the case for suing to block Comcast’s purchase of TW Cable on the grounds that it would harm consumers. 

Their objection wouldn’t be the final word, as senior officials could overrule them. But at the moment the DOJ and FCC aren’t out there negotiating concessions and conditions either, which suggests a hardening of positions is definitely going on.

While the Comcast deal would put somewhere near 40% of consumer broadband under one roof, it would combine two companies that don’t really compete with each other directly and thus wouldn’t actually reduce the numerical number of choices available to the vast majority of consumers. But it would potentially give them greater bargaining power both for content and traffic exchange, and thus some are making the case that it would have too much influence over changes in how programming makes it to the consumer, whether streaming or otherwise.

It’s a less direct case that I didn’t think they’d try to make, but it looks like they are. Both Comcast and TWC are sending representatives to Washington this week to soothe regulators’ worries and prevent the collapse of the deal.

Should they fail (and what can they really say that they haven’t already said?), two other deals that depend on it will also be tossed. Charter’s acquisition of some of the combined Comcast/TWC would obviously be toast, but then so would Charter’s purchase of Bright House Networks. On the other hand, Charter’s earlier ambitions to buy TWC themselves might then be rekindled.  For its part, Comcast would surely look to put its buying power to work *somewhere*.

But whatever Charter’s or Comcast’s other ambitions, a collapse of the Comcast/TWC deal would have significant reprecussions in the business Ethernet space.  The prospect of a new, nearly national competitor whose aggressive but territorially incomplete components were already growing at a prodigious rate and claiming marketshare would evaporate, and no other cable deal would have the same potential effect.

Once they figure out what to do on this one, regulators still have to do something with AT&T/DirecTV.  If they should move to nix that one too, it will have been quite a year for the consumer advocacy groups.

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Categories: Cable · Ethernet · Government Regulations · Mergers and Acquisitions